Android phone prices to drop soon: Here's the reason

It appears that manufacturers might opt to keep prices high, using lower production costs to boost their profit margins on premium devices
An undated image. —Adobe Stock
An undated image. —Adobe Stock

Android phone prices are on the verge of a steep decline, as the newly launched MediaTek Dimensity 9500 chipset is listed at a price tag of just $180 to $200 per unit.

Disrupting the Android flagship phone market, the new MediaTek Dimensity 9500 chipset is over 50% cheaper than Qualcomm’s Snapdragon 8 Elite Gen 5, which comes at around $280.

This price drop might equip more affordable Android flagships with the Dimensity 9500.

Still, it appears that manufacturers might opt to keep prices high, using the lower production costs to boost their profit margins on premium devices.

Industry insiders suggest that the substantial cost difference encourages Android phone makers to adopt MediaTek’s latest system-on-chip (SoC), especially those aiming for higher profits while still offering premium features. 

That said, smartphones at a lower price may come with some compromises in performance, power efficiency, and heat management.

The Dimensity 9500’s affordability is courtesy of using ARM’s pre-designed CPU and GPU, rather than developing custom cores.

While this approach results in reduced research and development costs, it limits performance tuning. As a result, early benchmarks indicated that the Dimensity 9500 lags in multi-core performance and displays higher power consumption compared to competitors.

Despite these limitations, its competitive pricing is expected to make the Dimensity 9500 an attractive choice for manufacturers aiming to strike a balance between cost and efficiency, particularly in the upper mid-range and budget flagship markets as we get closer to 2026.